Known for its status as a global financial hub, Hong Kong provides a gateway to Asian markets and a high degree of legal protection for businesses.

Companies looking to hire in Hong Kong can benefit from a highly educated and skilled workforce, strategic location, robust economy, and business-friendly environment.

Types of Contracts

Employment contracts in Hong Kong can either be fixed term or indefinite, and there are no limitations on job titles that can be hired in Hong Kong.

Working Hours

There is no law in Hong Kong establishing a standard workday or workweek, setting a maximum number of work hours, or requiring payment of overtime. Such matters may be negotiated between the employer and the employee via an employment agreement. The common practice in Hong Kong is a 40-50 hour working week.

There is no law in Hong Kong binding a maximum number of work hours, or requiring payment of overtime. Such matters may be negotiated between the employer and the employee via an employment agreement.

Minimum Wage

Hong Kong's minimum wage is currently HKD 40 per hour, applicable regardless of age, contract type, or payment period.

Probation Period

There is no restriction on the use of probationary periods in Hong Kong, and they are common, typically ranging from 3 to 6 months.

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Taxes & Local Employment Costs

Employee Taxes

Individual income tax rates in Hong Kong depend on many factors, including number of children, and range from 2% to 17%. Employees also contribute 5% to the Mandatory Provident (MPF) Fund.

Employer Taxes & Contributions

Employers contribute 5% of the employee's relevant income into the employee's Mandatory Provident (MPF) Fund, subject to the minimum and maximum relevant income levels.

For monthly paid employees, the current minimum and maximum relevant income levels are $7,100 and $30,000 respectively, plus the above-mentioned 5% rule.

Any contributions exceeding 5% of the employee’s salary would be regarded as voluntary contributions to the MPF scheme and not deductible for tax purposes.

Annual Leave (Vacation)

Employees in Hong Kong are entitled to 7 days' annual leave with pay after serving 12 months under a continuous contract.

Progressive Increase:

• An employee's entitlement to paid annual leave increases by 1 day per additional year served.
• Maximum entitlement is capped at 14 days.

Pro-Rata Entitlement:

• Employees employed for under 12 months in the common leave year receive their leave entitlement on a pro-rata basis.
• Entitlement is rounded up to a full day of leave.

Handling of Unused Leave:

There are no statutory rules governing unused leave. Agreements commonly stipulate one of the following:

• Unused leave is forfeited at the end of the entitlement period.
• Unused leave is rolled over into the following period for a specified number of months (maximum of 12 months).

Holiday Pay

If an employee has been working for at least 3 months before a public holiday, they get holiday pay. Holiday pay should be paid on the next payday after the public holiday.

The daily rate of holiday pay is equivalent to the average daily wages earned by the employee in the 12-month period preceding specific dates. For employees employed for less than 12 months, the calculation is based on the shorter period of employment.

Sick Leave

Employees in Hong Kong receive 2 paid sickness days for each completed month of employment during the first 12 months, and 4 paid sickness days for each additional completed month of employment.

Paid sickness days can be accumulated throughout the entire employment period -- though accumulation should not exceed 120 days at any one time.

Sick Leave Pay:

• The daily rate of sickness allowance is 80% of the average daily wages earned by the employee in the 12-month period preceding the sickness day.
• If an employee is employed for less than 12 months, the calculation is based on the shorter period.
• Sickness allowance should be paid to the employee no later than the normal payday.
• Failure to pay sickness allowance without reasonable excuse may result in a fine of $50,000 upon conviction.

Supporting Documentation for Sick Leave:

Sick leave in Hong Kong should be supported by an appropriate medical certificate. For absences due to compliance with specific anti-epidemic requirements, proof of such requirement is required under the Prevention and Control of Disease Ordinance (Cap. 599).

Maternity Leave

Employees in Hong Kong are entitled to 10 weeks of continuous maternity leave, and maternity leave is paid at 80% of the employee's regular salary.

To be eligible for paid maternity leave, an employee must have worked in the company for at least 40 weeks before the leave.

The employee can inform their employer of their intention to start the leave at least 2 to 4 weeks before the confinement date. Failure to notify the employer results in leave commencing 4 weeks before the date of confinement.

Paternity Leave

Paternity leave is granted for 5 days to fathers before or shortly before the birth of a child. These days may be taken separately or consecutively based on the employee's preference. A father must have been employed for no less than 40 weeks to qualify for paternity leave.

Additionally, a man can be entitled to paternity leave if they adopt a child and assume full responsibility (this applies if the adopted child is under the age of eighteen years).

An employee must notify the management of their intention to take paternity leave:

• 3 months prior to the leave, or
• At least 5 days before commencing the leave.

While on paternity leave, the employee receives 80% of their normal daily wage.

Other Leave

The following leaves are not mandatory, but are regularly offered by employers in Hong Kong:

• Birthday Leave
• Work Injury Leave
• Vaccination Leave
• Compensation Leave / Bereavement Leave
• No Pay Leave
• Marriage Leave
• Study Leave

Public Holidays

There are several Public Holidays in Hong Kong. Public holidays that fall on a Sunday are moved to a weekday as a day off in lieu. Public holidays that fall on a Saturday are usually lost.

• New Year’s Day - January 1
• 1st, 2nd, 3rd, 4th Day of Lunar New Year - Moveable based on Lunar calendar
• Good Friday - 2 days before Easter
• Holy Saturday - Day after Good Friday
• Easter Monday - Day after Easter Sunday
• Ching Ming Festival - 15 days after March Equinox
• Labor Day - May 1
• Buddha's Birthday - Moveable
• Tuen Ng Festival - Moveable
• HKSAR Establishment Day - July 1
• Day following the Mid-Autumn Festival - Moveable
• National Day - October 1
• Chung Yeung Festival - Moveable
• Chinese Winter Solstice Festival - December 21
• Christmas Day - December 25
• Day after Christmas - December 26

Termination Process

In most cases, employers need cause to terminate an employment contract.

An employer may terminate an employee’s contract without notice in cases of serious misconduct, such as:

• Willful disobedience of lawful and reasonable orders.
• Misconduct.
• Fraud or dishonesty.
• Habitual neglect of duties.

Note: Participation in a strike is not grounds for termination without notice or payment.

An employee may terminate their employment contract without notice if:

• They reasonably fear physical danger by violence or disease.
• They are subjected to ill-treatment by the employer.
• They have been employed for at least 5 years and certified by a registered medical practitioner as being permanently unfit for work.

Summary dismissal is a serious disciplinary action, and it applies only to cases of very serious misconduct or failure to improve after repeated warnings from the employer.

Notice Period

During probation, the minimum notice period is 7 days. Outside of probation, the minimum notice period is 1 month. Payment can be made in lieu of notice.

Statutory Payments

Any unused leave must be paid out in the employee’s final salary. Additionally, severance may be payable to the employee based on their length of service.

Termination payments usually include:

• outstanding wages;
• payment in lieu of notice, if any;
• payment in lieu of any untaken annual leave, and any pro rata annual leave pay for the current leave year;
• any outstanding sum of end of year payment, and pro rata end of year payment for the current payment period;
• where appropriate, long service payment or severance payment;
• other payments under the employment contract, such as gratuity based on the length of service, provident fund, etc.

Guide to Severance Payments

Employees with continuous service for 2 years or more are eligible for severance payments.

These are calculated using either:

• Base amount per year of service, OR
• 2/3 of the employee’s last full month’s wages (monthly average of wages earned during the previous 12 months or shorter period if employed for less than 12 months), OR
• 2/3 of HKD 22,500, whichever is less.

Total severance payment is capped at HKD 390,000. Employers can offset liability by any gratuity or retirement scheme payment made to the employee for the years of service for which the severance payment is payable.

Presumption of Redundancy:

• There's a statutory presumption that termination arose due to redundancy.
• Employers can only rebut this presumption by proving termination was wholly unrelated to redundancy.

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